- 19 Nov 2020
- Tony Kioussis
- Market Insight
Considering Covid-19, and the consequent global economic impact, is now the time to re-evaluate the role of business jets in this ‘new normal’? Jetcraft’s David Dixon explores…Back to Articles
There’s no Harvard Business School course for dealing with the impact of coronavirus. This situation feels like the global financial crisis of 2008 and SARS (and more besides) rolled into one. Nevertheless, it's possible to a role of business jets in the coming months and years, as David Dixon explores...
Few industries, if any, have suffered as badly as the airline sector. Traffic demand collapsed rapidly as the coronavirus pandemic spread globally. And those struggles are far from over. In our new (abnormal) normal, adding intense medical caution to security checks will surely make the airline and airport experience even more time-consuming and frustrating than before.
‘Medical passports’ might be needed to verify your health status. You may have to provide a detailed history of your travel activities before arriving at the airport. Priority boarding will be a non-essential complication many airlines may abandon. And we’re not only talking about the departures process; arrival terminals are imposing new checks too.
In short, one of the business traveler’s worst nightmares – ‘dead’ time in an airport – is about to become more common and lengthy, and who knows when (or if) that situation will improve.
As airlines streamline and restructure to survive, some direct city-pair connections will disappear and frequencies could plummet. Passengers will be forced into high-risk transit stops (which bring with them heightened potential for delays), or onto slow-moving surface transport.
And as some airlines remove larger aircraft from their fleets, such as the Airbus A380 and Boeing 747, those luxurious first-class cabins will be eliminated too. As airline services are cut, where do we go from here? The corporate world can’t just stop moving.
A Business Jet Solution?
Avoiding crowded commercial terminals and connecting flights, and instead flying directly to and from spacious private facilities at your local airport and destination on a business jet, is such an attractive option.
Exposure to risk through fellow passengers is dramatically reduced when you are only travelling with colleagues or family members, instead of pushing past hundreds of strangers in airline terminals which are simply not designed for social distancing.
Business Aviation’s coronavirus experience has been very different from that of the airline industry. Responding quickly to public need in the crisis, jets were mobilized at once for evacuation and repatriation flights, initially from China and then across the world as the virus spread. Aircraft used to carrying passengers suddenly began delivering urgent medical supplies instead.
Predictions of doom and gloom in business jet sales have proved unfounded to date. Deals have continued to close and market prices haven’t been hit nearly as hard by COVID-19 as by the 2008 economic crisis.
Unlike in 2008, today’s troubles haven’t been caused by a financial sector massively overselling exposure. And there aren’t a large number of opportunistic speculators hoping to make a quick profit from business jets for sale with no interest in sustaining a healthy industry. Fractional operators have not been forced to dump a lot of capacity.
Assets, not Toys
Selling aircraft is hard – I once sat through three hours of Beijing Opera, oblivious to what was going on around me, to close a deal in China. But the appeal of business jet ownership is arguably stronger now than ever before.
It’s easy to dismiss corporate jets as an extravagance, but the owners of these aircraft see them as invaluable, time-generating assets. For as long as the threat of coronavirus remains, the on-board experience of a business jet passenger will be – and, critically, will feel – far safer than travelling by airline.
The latest high-efficiency particulate air (HEPA) filters are now fitted in many business jets. Consequently, air quality in these aircraft is so good there is a far greater risk of virus infection in an airport, car, office or shopping mall.
And let’s not ignore another key health angle – no airline can match the level of personal security and privacy offered by a business aircraft.
A Time for Change?
If you want to survive and thrive in these turbulent times, you need to be flexible, inventive and tenacious. Right now, people who own business jets are committed to keeping them. Moreover, people who don’t own these assets but can afford to do so are thinking very hard indeed about acquisition.
Business jets are perfect to facilitate the type of vital, face-to-face, C-suite meetings COVID-19 brought to a sudden stop; meetings the world needs to happen for the economy to recover and prosper.
And when large public events are possible again, Business Aviation will be there to support lucrative corporate hospitality. The economy needs these injections of investment and income.
Through no fault of their own, many airlines are struggling to function and survive right now. A bright future for Business Aviation – which, unlike the airline industry, is poised to grow quickly – could help kick-start the global economy and is a possibility we can’t afford to ignore.
About David Dixon
David Dixon is president of leading aircraft sales specialist Jetcraft Asia.
He was a founding member of the Asia Business Aviation Association (AsBAA) and was Vice Chair from June 2017- June 2019.
His book "I Sell Aircraft – No ‘Plane’ Business" was published in June 2020.
It can be purchased via Amazon and takes readers through a 47-year journey in aircraft sales.
Visit David Dixon on Linked In